Estate Agent Withdrawal Charges

[steevob]

I withdrew from the sale of my house due to a change in circumstances. Sale had been agreed but no contracts exchanged.

The Estate Agent has applied to the court for payment of 50% of the agreed fee.

The agreement clause reads:

"In the event that the seller withdraws from an agreed sale after solicitors have been instructed, we reserve the right to make a charge of 50% of the commission fee quoted, plus VAT."

The amount is £1,746. This seems unfair and unreasonable. I have asked for itemised costs (not received) and offered £200 in full and final settlement. I have been offered a 'compromise' of £1,000.

The clause was not expressly brought to my attention prior to signing and was not mentioned when I cancelled by phone or subsequently by email. I received an invoice by post some 4 weeks later.

Should I expect the court to rule against me?

[Crazy council]

Re: Estate Agent Withdrawal Charges

are u sure thats the only clause that refers to it.

usually there is one that covers advertising and taking the property on. / administration

Did the property sell,

The clause was not expressly brought to my attention prior to signing and was not mentioned when I cancelled by phone or subsequently by email. I received an invoice by post some 4 weeks later.

Its a standard clause, so theres no reason why they should have expressly notified you of it Your supposed to read and understand a contract before you sign it.

There may be reasons why you could reduce it, but you havent put any of them down

[Mr $quanda£ot]

Re: Estate Agent Withdrawal Charges

are u sure thats the only clause that refers to it.

usually there is one that covers advertising and taking the property on. / administration

Did the property sell,



Its a standard clause, so theres no reason why they should have expressly notified you of it Your supposed to read and understand a contract before you sign it.

There may be reasons why you could reduce it, but you havent put any of them down

I don't believe that it's a standard clause. I have sold properties on two occasions in the past. In 2000, a buyer was found but I had to pull out. I didn't have to pay anything. I used a firm of estate agents that were part of the Countrywide group.

When I sold again in 2007 I read the contract fully before signing. No such clauses were included. That time I was using a local independent agents and they managed to sell my flat but only after instructing other agents to compete with them!

Some agents do have this 'ready, willing and able' buyer clause, meaning if they introduce a buyer who is ready, willing and able to exchange contract and you then pull out a charge (some times full fees) becomes payable. My advice has always been not to use such agents.

This type of clauses have been criticized and there's been calls to make them illegal. However, I am not aware of them being currently illegal. However, there are plenty of agents out there - or at least there were - who didn't have any clauses penalising the vendor should they decide to pull out for any reason.

The coin has two sides once again. I can see why some agents are keen to charge vendors who instruct them and then pull out later as that kind of practice is clearly wasting their time. On the other hand, estate agents earn much more than solicitors on successful sales. 2% on a typical £500k London property is £10k (plus VAT for the government, not to mention the stamp duty the buyer pays).

It goes without saying that you should always read the contract before signing it and refuse to sign it if you are not 100% content with it. It puzzles me why so many people fail to do that. Especially when it comes to selling your home or property. It's a big decision so surely spending 10-15 minutes to read the contract is not too much to ask?

[Crazy council]

Re: Estate Agent Withdrawal Charges

This type of clauses have been criticized and there's been calls to make them illegal. However, I am not aware of them being currently illegal. However, there are plenty of agents out there - or at least there were - who didn't have any clauses penalising the vendor should they decide to pull out for any reason

These have been standard clauses for years, i doubt you would find an agent without this clause after 2006/7, and its entirely fair.

When you walk into yuor estate agents, see the secretary, she needs paying for, so does it cost to produce brochures, show people around, deal with people on the phone, sort the paperwork, rent rates etc ect.

If people were just not allowed to pay something they have properly contractually signed for, imagin how much of a mess things would be.

There are genuine reasons for withdrawing these charges ( thats why i asked if the property was sold or being sold ),

[gonewiththewind]

Re: Estate Agent Withdrawal Charges

Did you sign the contract in the Estate Agents office, or at home? Did the contract give you a cooling off period?

[Mr $quanda£ot]

Re: Estate Agent Withdrawal Charges

Well, I sold in 2007. Neither an independent one nor Winkworth had that kind of clause.

I'd rather use Sarah Beeny than agents like that.

[Crazy council]

Re: Estate Agent Withdrawal Charges

Well, I sold in 2007. Neither an independent one nor Winkworth had that kind of clause.

Lol, but how many estate agents survived the little bump in 2007, i said 2006-7 because the market had started collapsing in other areas before it fully collapsed
Am only saying, doing think most estate agents are like the caricature the media portrays . A proper estate agent, is like a financial asset manager. and they know the local market like the back of there hand. Thats what you pay for.

[Mr $quanda£ot]

Re: Estate Agent Withdrawal Charges

It could be an option to tell the agents that your £200 is your full and final settlement offer, and otherwise you will defend the claim in full.

Whether that is going to work or not will depend on various factors such as how much work and effort your agents put into marketing your property, if they advertised it on rightmove, zoopla etc.

There is always a possibility that the agents decide to withdraw their claim once they know that you have decided to fight it. Of course, this isn't something that you can rely on.

Whether these charges are fair or not is a matter of an opinion. Nature of any agency business is that very often deals fall through and you don't get rewarded for your work, hence relatively high commission rates. Take employment agencies, for example - ironically many estate agents are ex recruitment consultants or vise versa - how many times a client company instructs a recruiter to find someone but then fills the vacancy internally? My understanding is that most recruiters don't get rewarded if/when that happens, regardless of the amount of work involved.

[steevob]

Re: Estate Agent Withdrawal Charges

Did you sign the contract in the Estate Agents office, or at home? Did the contract give you a cooling off period?

I signed at home and then handed the agreement into their office. There was a 14 day cooling off period.

[des8]

Re: Estate Agent Withdrawal Charges

I must say that clause sounds to me to be in breach of UTCCR 1999
cf Schedule 2 e "requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;"

The annex to the OFT guide to the UTCCR under Cancellation fees and penalties gives this example:
Original termThe Company reserves the right to charge a cancellation fee, theminimum being 30 per cent of the order value, this does not represent apenalty and serves to liquidate the company's costs.Action takenTerm deleted.
The intention behind the withdrawal fee should be to compensate the EA for their costs and expenses incurred by virtue of the contract, so the EA need to quantify their losses.

[steevob]

Re: Estate Agent Withdrawal Charges

I must say that clause sounds to me to be in breach of UTCCR 1999
cf Schedule 2 e "requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;"

The annex to the OFT guide to the UTCCR under Cancellation fees and penalties gives this example:
Original termThe Company reserves the right to charge a cancellation fee, theminimum being 30 per cent of the order value, this does not represent apenalty and serves to liquidate the company's costs.Action takenTerm deleted.
The intention behind the withdrawal fee should be to compensate the EA for their costs and expenses incurred by virtue of the contract, so the EA need to quantify their losses.

Thank you ... I think UTCCR 2013 is the way for me to defend this.

[Crazy council]

Re: Estate Agent Withdrawal Charges

Thank you ... I think UTCCR 2013 is the way for me to defend this.

Hi [MENTION=47244]ste[/MENTION]evbo

just be careful that there are not also other terms in the contract that allow the agents to claim further costs against you for the recover of the fees, ..

There is an important question.....

Have you made a sale or disposed of the property, or was it withdrawn from the market to be your main home residence

Did the agent produce a brochure, advertise the property, s

you say

Sale had been agreed but no contracts exchanged.

On the outset, it seems like they have done the job that they were contracted to, the offer from them to settle at half costs, i snot unusual if the owner found there own seller.

wreras, if you have sold, and done a deal with the purchaser that they was going to, be careful about challenging them,

[steevob]

Re: Estate Agent Withdrawal Charges

I have not sold the house and it is still my sole residence.
It seems to me that the intention behind the withdrawal fee should be to compensate the EA for their costs and expenses incurred by virtue of the contract - it should not serve to penalise me in circumstances where I no longer wish to sell.

[Crazy council]

Re: Estate Agent Withdrawal Charges

Hi steve. that easyer to argue then, if you have not made a sale or disposed of the property.

It seems to me that the intention behind the withdrawal fee should be to compensate the EA for their costs and expenses incurred by virtue of the contract

Understood, but, there is a reletive costs for an estate agent for dealing with it in the first place 2 possible ways to deal with this. Am not saying they will work, just and agle to try from

1. Offer them some money ( 2-300 ) or so, agree that if the property is sold in the next year or so, you will pay there fees, ask them if they will accept that ( do not make it a full and final offer )

2 Offer them £ 500 as full and final settlemt, ask them to provide you a listing of the associated costs if its not accepted

Provisionally, you probably owe them the full, although, it might not be an easy argument for them in court if the property has not been sold. If i was the estate agent on this matter. I would consider to accept option 2, or option 1 depending on the costs they laid out on your property

[dslippy]

Estate agents now have a much wider range of working arrangements, and it is probably not correct to refer to standard working arrangements. This applies particularly as to the element of risk they bear that a house will not sell.

I suspect that the 1k offer from the agent should be accepted. The term is clear, and was brought to the OPs attention even if he didi not trouble to read it.

When I began in practice we acted for a couple of local agents. My principal said that Agents always win such actions. That was not absolutelyy tru, but generally it was.